REX

Brussels, 14 July 2009

10th Regional Seminar of ACP-EU Economic and Social Interest Groups

Report on

Ensuring sustainable food security in ACP countries:

the views of ACP-EU non-state actors

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RAPPORTEUR Mr Yves Somville Member of the ACP-EU Follow-up Committee Director Research Department Walloon Agricultural Federation Belgium

EXPERT Mr Marcel Mazoyer Agronomist Lecturer at the university of Paris XI Vice-president of the French Association for the FAO (AFFAO) Vice-president of the French Alliance Against Hunger ______

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1. Introduction

1.1 The dramatic escalation in agricultural commodity prices experienced worldwide from the end of 2007 to the beginning of 2008 came as a surprise to decision-makers, experts and consumers alike. It was the first time such a situation had been recorded since 1973.

1.2 Agriculture was put back on the agendas of all the various national and international structures and stayed in the headlines for several weeks.

1.3 The effects of rising food prices were felt particularly acutely by people in the least developed countries. These communities, who spend up to 70% of their income on food, had no alternative but to reduce their "non-food" expenditure, with all the knock-on effects that implies.

1.4 The situation also led to various kinds of social disruption, even causing hunger riots in several areas of the world, mainly in urban areas.

1.5 At the end of 2008, the FAO confirmed that world cereal production for that year had reached a record high, leading to a steep fall in international prices. However, while market prices have fallen, food prices have remained at high levels in most developing countries and have even risen in some places.

1.6 A number of experts believe that the current crisis is the result of two decades of lack of interest in farming for food, both on the part of the international community and many governments from the South.

1.7 The 2007/2008 crisis ought to be the catalyst for a change in direction. In particular, some voices are calling for agriculture to be considered as a special sector. In the context of international trade negotiations, various experts are advocating that, without abandoning the multilateral approach, due regard be paid to the concept of food security.

1.8 The current situation and future challenges require both political measures and concrete short- medium- and long-term action, in the hope that the combination of the economic and financial crisis which began in the summer of 2008 and the fall in the price of oil do not blind us to the absolute necessity of changing existing strategies.

2. The main causes of the food crisis

2.1 The causes of these pressures on agricultural prices include rising demand, changing patterns of food consumption in some emerging countries, the rise in the price of oil, which has an indirect impact on the price of inputs, biofuels policies and, lastly, climate-related incidents in various food-exporting regions of the world. Other factors, such as financial speculation, the

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agricultural policies pursued over recent years and low world food stocks can also be added to the list.

2.2 On the demand side

2.2.1 The growth in demand is connected with the inexorable rise in the world population, which is currently increasing at a rate of 85 million a year. All the forecasts show that the world population will hit 9 billion by the middle of the century. Africa alone will see its population double to 1.8 billion people between now and 2050!

2.2.2 In parallel, in the emerging countries there has been a significant growth in the middle class, which is currently estimated at around 600 million people. This sector of the population has begun to consume more and differently, increasing demand for agricultural products, both plant and animal, at a time when supply has been reduced for various reasons. This trend is set to continue over the coming years.

2.3 On the supply side

2.3.1 The weather and climate-related incidents that occurred in various parts of the world contributed to the dramatic rise in the prices of agricultural products. Australia, a major wheat producer and exporter, experienced a dramatic drop in production in 2006 following an extremely serious drought which affected the country as a whole. Other producers such as Ukraine and Mozambique suffered from major flooding, which diminished their harvests.

2.3.2 Since international trade in agricultural and food products concerns 10-11% (in tonnage) of available world stocks, as soon as one exporting country is affected, the impact on world prices is immediate.

2.3.3 The increase in the production of biofuels in various parts of the world is another contributing factor. However, we must avoid conflating the EU's policy in this area with the policy conducted in other countries.

2.3.4 The reduction in supply has also been exacerbated by the continuous fall in food stocks observed since 1990 and the simultaneous rise in the cost of energy, inputs and freightage. The impact on net importing countries has been particularly severe.

2.3.5 Lastly, global supply has been reduced both by "panic buying" conducted by several net importers with a view to building national stocks and by the prohibitions on exports introduced by some countries that are usually exporters.

2.4 Speculation

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2.4.1 Although speculation is not in itself a cause of shortage, by projecting long-term price rises, based on factors such as a probable growth in demand combined with limited supply, it has contributed significantly to the increase in the prices of agricultural products.

2.5 Disinvestment from agriculture

2.5.1 For around forty years, development policies have neglected agriculture in favour of other activities, such as the extraction of raw materials and industry. In developing countries, only 4% of public aid goes to agriculture, despite the fact that 70% of the population lives in rural areas.1

2.5.2 For various reasons, notably compliance with structural adjustment programmes, export crops have been encouraged, to the detriment of local and regional farming for food. Cash crops, most frequently traded at prices that are not remunerative for producers, have contributed to a growing rural exodus and a growth in food imports due to inadequate domestic production.

2.5.3 The vulnerability of some countries that are totally dependent on the global market and its price fluctuations has been exacerbated by the absence of minimum regulation and the lack of storage facilities.

2.5.4 Conversely, a number of countries that are now net importers were self-sufficient in food in the 1960s.

2.6 Outlook

2.6.1 In the OECD-FAO Agricultural Outlook - 2007-2016, drafted before the crisis, the organisations concur in forecasting pressures on agricultural prices. Economic growth and the correlated increase in per capita incomes, in conjunction with galloping urbanisation, will lead to growing needs for meat and dairy products and animal feed in developing countries.

2.6.2 On the other hand, production in these countries could be adversely affected by unfavourable soil and climate conditions, a shortage of land and the rising population. Although they stress that the expansion of imports is one of the solutions, the two agencies also call for the development of local and regional agriculture.

2.6.3 Although prices have fallen sharply since their peaks in 2007/08, they are forecasted to remain high in relation to their level over the past decade. It must be noted that the overall framework has now completely changed.

3. Various initiatives since the beginning of the food crisis

3.1 Reactions at international level

1 Jeune Afrique No. 2468.

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3.1.1 The food crisis and its repercussions brought an immediate response from international bodies. At the end of April 2008, the United Nations System Chief Executives Board decided to set up a Task Force on the Global Food Crisis, with the aim of creating a prioritised plan of action and coordinating its implementation. A report was published in July.

3.1.2 At the very beginning of its presidency, France organised a meeting on the theme, "Who will feed the world?". The FAO had already held a meeting in Rome in June on the same subject.

3.1.3 In March 2008, the ACP-EU Joint Parliamentary Assembly adopted a report on food security issues in ACP countries and the role of ACP-EU cooperation. The report looks at the importance of the agricultural sector to the economies of the ACP countries, ACP-EU cooperation and trade in the context of food security and challenges such as producers’ incomes, the crucial role of women as regards production and health and the dramatic effects of HIV/Aids on the productive labour force.

3.1.4 At its meeting in Prague at the beginning of April 2009, the Joint Parliamentary Assembly (JPA) stressed the importance of the Cotonou agreement in helping ACP countries to face the effects of the global economic crisis, the food crisis and climate change.

3.1.5 The G8 Summit in Japan in July 2008 approved a final declaration on the subject of global food security. In recognition of the gravity of the problems caused by the rise in food prices, Ministers of Agriculture were asked to formulate concrete proposals on global food security.

3.1.6 On 19 March 2009, the farmers' unions of the G8 countries concluded their meeting by issuing a common declaration calling on each country to put agriculture back at the core of its socio-economic development. In the face of the future challenges, the final document calls on the governments of the G8 countries to give clear guidance and incentives to their farmers to further develop their agricultural production, whilst taking into account the needs of farmers and communities in developing countries. As well as stressing the need to create conditions to improve international stock management, the declaration also urges that "International trade liberalization discussions should be approached gradually taking into account different socio-economic and environmental realities and the need for different models of agriculture to co-exist".

3.1.7 In this context, on 18-20 April 2009, Italy hosted the G8's first Agriculture Summit, also opened to 6 emerging countries. The objective of the meeting was to define a common strategy in order to restrict price volatility and limit the impact of future world food crises, and with close collaboration between the relevant UN agencies, the World Bank and the governments concerned. A thirteen-point resolution was adopted, placing agriculture and food security at the core of the international agenda.

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3.1.8 In mid-April, African farmers' organisations addressed the G8, calling for recognition of each country's right to introduce agriculture and trade policies directed towards food security, stressing the importance of family farming and technological development and emphasising the need to adopt land ownership policies protecting small farmers and vulnerable groups.

3.2 The European "Food Facility"

3.2.1 In the first half of 2008, the EU proposed that an unused 1 billion Euros from the agriculture budget be used to support agriculture in the countries most affected by the food crisis. In December 2008, the European Parliament and the Council adopted a regulation establishing a "Food Facility" for this amount, drawn not from the EU's agriculture budget but from its foreign aid budget. The European Commission made its first concrete decisions at the end of March 2008.

3.2.2 Midway between emergency aid and medium- to long-term development cooperation, the Food Facility initiative will operate for a period of three years and aims to improve access to agricultural inputs and services, introduce measures to increase agricultural production and support safety net measures, allowing for social transfers to vulnerable population groups. This aid will be provided via international bodies or NGOs.

3.3 The right to food and trade negotiations

3.3.1 In a report presented in March 2009, Prof. Olivier De Schutter, UN Special Rapporteur on the right to food, addressed the issue of compatibility between agricultural trade liberalisation and the obligation of WTO members towards the human right to adequate food, as recognised by international law.2

3.3.2 The summary of this report states that "if trade is to work for development and to contribute to the realization of the right to adequate food, it needs to recognize the specificity of agricultural products, rather than to treat them as any other commodities, and to allow more flexibilities to developing countries, particularly in order to shield their agricultural producers from the competition from industrialized countries’ farmers."

3.3.3 The strongest argument put forward in favour of this approach is the vast discrepancy in productivity per active agricultural worker between developing countries, ACP countries and developed countries.

3.3.4 The report makes a number of points worth highlighting in the context of trade and the right to food, mentioning "the need for States to prepare national strategies for the realization of the right to food", emphasising "the importance of a collaborative multilateral trading system, and one which should not impose on States commitments that are contrary to their human rights obligations, (...) the perspective from the right to adequate food requires a shift (...) to

2 Report by the Special Rapporteur on the right to food, O De Schutter, presented to the Human Rights Council on 09/03/09.

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focusing on the needs of the vulnerable and food insecure", and stressing that "Impacts on health, nutrition and the environment should therefore be fully integrated in trade discussions."

3.3.5 In order to help national governments implement the reform programme of the WTO's Agriculture Agreement whilst respecting the right to food, the report aims to identify the impact of agricultural trade liberalisation on national governments' ability to protect this right. It highlights certain risks that governments must take when implementing their national strategies and defining their negotiating position within the WTO.

3.3.6 The report also sets down four basic recommendations on how to make the international agricultural trade system human rights-compatible: undertakings of States under the WTO framework in line with the realisation of the right to food, possibility of adopting safeguard measures, specific support for small-scale farmers and better control of global supply chains.

3.4 IAASTD

3.4.1 The IAASTD3 was initiated in 2002 by the World Bank and the FAO, with a view to examining the impact of agricultural, scientific and technological knowledge on reducing famine and poverty and improving means of subsistence and healthcare in rural areas, whilst ensuring sustainable development in social, environmental and economic terms.

3.4.2 The assessment does not set down policies but, rather, serves as a decision-support tool. The various documents resulting from the assessment carried out by some 400 independent, international experts were adopted at an intergovernmental plenary meeting held in Johannesburg in April 2008.

3.4.3 A number of the challenges and observations raised by the IAASTD are worth mentioning. Demographic challenges, changes in eating habits and the depletion of resources require an appropriate agricultural policy, particularly given the report's statement that "In developing country urban markets with poor rural connectivity there could be increasing reliance on imports, which provide cheaper food but undermine rural employment and livelihoods and deter investment in mitigating land degradation."

3.4.4 The report also mentions the need to promote the development of better institutional and organisational arrangements, and increase the autonomy of producers' organisations so that they can be involved in decisions taken in areas such as applied agricultural research, or the ways in which advice can be transmitted to producers on the basis of the research findings.

3.4.5 Other key topics such as trade, management of natural resources, investments and the issue of gender are also covered in detail. The last point is crucial, as women have benefited less from

3 International Assessment of Agricultural Knowledge, Science and Technology for Development.

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knowledge and technology transfer than men have. Their key role in the production industry means that efforts are required in this field.

3.5 NGOs and food sovereignty

3.5.1 Lastly, in addition to the numerous official initiatives, it is important not to overlook the many actions taken by NGOs, such as the work carried out in Belgium by a group of NGOs on the subject of food sovereignty, which resulted in a joint publication.4

3.5.2 The work develops the idea that agriculture is not a "typical" sector, and it should be approached as a complex issue both in terms of its food-providing function and its ability to trigger economic development and thus boost employment.

3.5.3 Local and regional production is considered to be a priority, and peasant farming should be at the heart of the system, with a twofold aim: to provide peasants with fair pay for their work, and to provide urban consumers with a safe, sustainable supply.

3.5.4 These initiatives – which help to showcase the agricultural sector as a key industry for the planet in general and ACP countries in particular – are useful as they draw attention to the need to develop effective agricultural policies throughout the world. The great risk is that the current decline in prices for agricultural commodities could mean that the good resolutions taken at all levels are too quickly forgotten.

4. General comments

4.1 Price increases: both a negative and a positive

4.1.1 Throughout the world, it will only be possible to develop or even strengthen agriculture if those involved receive fair pay in the long run. From this perspective, the increase in prices of agricultural products could prove to be a positive factor, provided that the profits are fairly shared out among all those working within the sector.

4.1.2 In developing and ACP countries, where peasant farmers represent a significant share of the population, this approach is key to containing the rural exodus.

4.1.3 As mentioned earlier, although only 10-11% of agricultural products are traded internationally, it is the price of those which are traded that becomes the reference, while trade barriers are dismantled or absent. However, this price is far removed from the economic reality of most peasant farmers in the south.

4.2 Access to land

4 Souveraineté alimentaire: un agenda pour agir, CNCN, CSA, Oxfam Solidarité, SOS Faim, 2008.

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4.2.1 The food and financial crises have transformed farmlands into attractive new sources of revenue for the financial sector in search of sounder investments.

4.2.2 In addition to the factors mentioned above (demographics, diet, etc.), available arable land is becoming scarce and water reserves are running low in some parts of the world. Together, these aspects point to a growing interest in the acquisition of potential farmland.

4.2.3 Although people have always invested in land, today the phenomenon is accelerating. Now it is not just agri-business that is investing, out of concern for its own supply, but national governments and sovereign wealth funds.

4.2.4 Thus, governments, concerned about their populations' food supply, are acquiring vast tracts of farmland abroad so as to guarantee their own food production. These countries do not have enough arable land to meet their own needs, and want to be prepared for any sharp increase in food prices in the future, such as that registered in late 2007 and early 2008.

4.2.5 Financial groups are acting in the same way. With the bad memory of the financial crisis still fresh in their minds, and with regard to the potential for stability in the medium and long term, these investors are banking on the growing profitability of food trade in the future.

4.2.6 This widespread phenomenon, which seems to be gathering speed, presents a number of risks. If these investments are based on mechanisation, or even on the importing of foreign workers, this will lead to a reduction in available land and work for local communities and peasants. Conversely, some think that this will bring opportunities for these rural areas inasmuch as greater investments in farming could result in real rural development.

4.2.7 Even though the experts' forecasts differ, land availability will be a restrictive factor in the future. Mr Mazoyer believes that areas under crops could increase by 1.7 in 2050 as compared to 2000. Meanwhile, an FAO study projects an increase of only 8% by 2030 compared to the present day. This point is key given the threats already facing farmed land: growing urbanisation, degradation (erosion, salination, etc.), risk of desertification due to climate change, and so on. All agricultural development must involve serious discussion of the land policies to be implemented.

4.3 The special case of the ACP countries

4.3.1 The crisis has affected the entire globe, and all countries have been affected to some extent. However, particularly in the ACP countries, serious consideration should be given to the problem of guaranteeing supply for urban and rural populations in the medium and long term, whilst strengthening rural populations through an effective policy focused on revenue, land, training and structuring of the profession.

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4.3.2 Food insecurity is thought to affect more than one third of the population of the ACP countries, mainly in rural areas.

4.3.3 While farming is the dominant industry in the ACP countries, both national governments and international bodies have not given this activity the importance that it has deserved in their policies, in recent decades. The JPA report5 states, in the recitals, that "(…) only four of the 78 ACP countries made agriculture a priority sector under the 9th EDF, while 15 chose rural development, and whereas only 7% of the 9th EDF's budget has been allocated to rural development and 1.1% to activities specifically linked to agriculture".

4.3.4 As stressed by Commissioner Michel in his publication on EPAs6, over 50% of exports from ACP countries to the EU are for only 4 products (oil, diamonds, cocoa and timber). Since 1975, the ACP share of imports from the EU has dropped from 7% to 3%. Trade with the EU remains important for the ACP countries. However, it is striking that trade with the EU represents almost 30% of trade by ACP countries, and yet intra-ACP trade accounts for only 10% of the total.

4.3.5 According to Mr Michel, since 1990, foreign direct investment in developing countries has increased fivefold, but none of this has gone to the ACP countries, which only represent 3% of European FDI. Moreover, over 50% of the foreign exchange earnings of ACP countries are from exports of basic products.

4.3.6 In the ACP countries, although the tariff preference scheme has not brought the hoped-for development, some agricultural sectors have benefited from the preference mechanism, with a positive impact on exports (e.g. cut flowers in Kenya, fishing in various regions of Africa and the Pacific, and certain agricultural products (sugar, bananas, pineapples)).

4.4 Without fully dismissing the agricultural export model, and given the figures mentioned above, the priority should be to draft agricultural policies that promote local and regional markets and focus on rural populations in situ.

4.4.1 Lastly, in all developing countries and particularly the ACP countries, any discussion of the future of agricultural policy or nutrition in general should pay special attention to women, given their vital role in the entire process of agricultural production, particularly for subsistence crops.

4.5 Structuring of producers' organisations

4.5.1 In Africa, productivity is the lowest on the planet. Like many people, Robert Zoellick, president of the World Bank, believes that reforms are needed with regard to land,

5 JPA 15 March 2008: Report on Food Security Issues in ACP Countries and the Role of ACP-EU Cooperation.

6 APE: moteurs du développement, Louis Michel, European Commission, 2008.

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agricultural inputs, marketing and, above all, the emergence of an agri-foods industry that processes raw materials and is able to absorb the workforce made available as a result of increased productivity. Clearly, massive investments will be required, and it will be important not to forget about training and structuring of rural civil society organisations.

4.5.2 In his report, Nourrir le monde en 2050 (Feeding the world in 2050), André Neveu7 looks at the challenge of meeting future food requirements in the context of sustainable development. His approach focuses on three sets of factors: agricultural potential, the economic context and agricultural policy.

4.5.3 In the first case, as there is only limited potential for increasing cultivated land, greater production will only be possible if yields are improved (with all that this entails), without neglecting the market preparation of crops in order to reduce losses.

4.5.4 Against this backdrop, emphasis should be placed on public research, although not to the exclusion of the private sector. Improving local crop varieties should be a priority, ensuring that the industry is involved in making these choices.

4.5.5 Today and in the future, it is more essential than ever to prioritise the organisation of producers. This is a crucial phase in order to meet the challenges of defining effective agricultural and trade policies, distributing research findings and market information, and more general training in order to strengthen the capacities of these producer organisations. The fragmentation of supply harms the bargaining power of peasants, both when purchasing agricultural inputs and selling products. Organisations of producers at local, regional and international levels will help with trade negotiations and could represent the industry in relations with decision-makers.

4.6 Growing urbanisation

4.6.1 The development of the urban population is a reality throughout the world, and is likely to increase in the future. This trend can affect agricultural production by creating competition for means of production such as land and water.

4.6.2 This urban growth also causes eating habits to change, insofar as these populations depend more on imported products which are often more accessible than those grown locally, due to insufficient infrastructure.

4.6.3 Careful planning will be necessary when cities are developed in order to limit their impact on the future of agricultural production and enable peri-urban agriculture to flourish. This will also require investment in infrastructure and stronger mechanisms for agricultural marketing, credit and the distribution of means of production.

7 Nourrir le monde en 2050, André Neveu, Académie d’agriculture de France, February 2009.

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5. Recommendations

5.1 The conclusions of various reports and seminars on the food crisis lead to proposals that are demanding in terms of financial and human resources. This report will focus on actions in which ACP-EU civil society could be specifically involved.

5.2 The ACP-EU Follow-up Committee hopes that the governments in ACP countries will make agriculture a key concern.

5.3 Despite the financial crisis, the Follow-up Committee urges the EU to honour its commitments in terms of aid, gauging the full extent of the investments needed for agriculture and rural development.

5.4 Without fully dismissing the agricultural export model, the Follow-up Committee believes that the priority should be to draft agricultural policies that promote local and regional markets and focus on rural populations in situ. This approach should be set up quickly, not only to increase agricultural production, but also to provide prospects for the economic development of rural areas and halt the rural exodus.

5.5 Urban food security must not be forgotten. In this regard, development policies should promote the emergence of peri-urban agriculture, with all it entails in terms of specific training, land management and water availability.

5.6 For the Follow-up Committee, any agricultural policy should include the set of factors needed to increase productivity and thence the development of a dynamic rural economy. It should be focused on research, training and dissemination of information, emphasising measures to boost investment in agriculture and giving access to the production factors of land, water, credit and other inputs.

5.7 With regard to infrastructure, particular attention should be given to storage capacities in order to reduce post-harvest losses, and to enable stored products to serve as potential collateral against micro-credit.

5.8 ACP civil society organisations, particularly producers' organisations, should be able to discuss the main lines of these policies, before decisions are made, so as to share their concerns and hands-on knowledge with the various persons responsible and decision-makers. The Follow-up Committee believes that producers' organisations must become true players in any agricultural and rural policy.

5.9 In order to give full meaning to the involvement of ACP civil society, appropriate measures must be taken to strengthen the capacities of civil society organisations, particularly peasants' organisations. In this regard, it is important that women be specifically taken into account.

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5.10 Bearing in mind the importance that most current reports give to agriculture and rural areas as the basis for development, the ACP-EU Follow-up Committee believes that it would be useful to initiate debate between governments and civil society on the subject of Food security and international trade, in the context of the Cotonou agreement and making use, where necessary, of impact studies.

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